Causes and Consequences of Transitional Goodwill Impairment Losses

Causes and Consequences of Transitional Goodwill Impairment Losses

Evidence from Canada

LAP Lambert Academic Publishing ( 2010-03-29 )

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This dissertation investigates the causes and consequences of the goodwill reporting choices made by Canadian firms following the adoption of revised standards on purchased goodwill in 2002. First, I show that transitional goodwill impairment losses are associated with managers' incentives to both overstate and understate them. Furthermore, independent board of directors and audit committees act as a constraint on Canadian managers' goodwill reporting choices to ensure that the economic value of goodwill is better reflected in financial statements. Second, I show that investors perceive goodwill as an asset, and goodwill impairment losses as sufficiently reliable measurements of a reduction in the value of goodwill to incorporate them in their valuation assessments. Finally, I show that transitional goodwill impairment losses were impounded in stock prices prior to 2002. Overall, the empirical evidence contained in the dissertation is consistent with SFAS 142/Section 3062 improving the quality of the financial information on goodwill provided in the financial statements.

Book Details:

ISBN-13:

978-3-8383-5369-2

ISBN-10:

3838353692

EAN:

9783838353692

Book language:

English

By (author) :

Pascale Lapointe-Antunes

Number of pages:

92

Published on:

2010-03-29

Category:

Business management